Netflix, Groupon, Facebook and Yahoo: Rising, Falling and Treading Water

The past week was a good one for Netflix, and the upcoming one could be even better. Shares of the company spiked nearly 20 percent over the week of July Fourth, driven up to $81.89 by CEO Reed Hastings’s announcement that Netflix subscribers streamed one billion hours of video in June.

An impressive metric, and one that, according to BTIG analyst Richard Greenfield, makes Netflix the most watched “channel” in either broadcast or cable television in the U.S. Add to that a bullish note from Citi Internet analyst Mark Mahaney, who reiterated his “buy” rating on the Netflix, as well as its $130 price target, and the stock is well-poised for further gains this week.

If Netflix investors have a good reason to get out of bed on Monday, Groupon investors have an equally good reason for staying in it, heads buried beneath pillows. The company has lately had a brutal run of it, with investors pushing its share price deeper and deeper into the mud. On Friday, Groupon closed at $8.44, a new all-time low for the company. That was down more than 4 percent for the day, and a gruesome 58 percent below its November IPO price. It’s also about 10 percent below what Google offered for the daily deals site when it attempted to acquire it in the fall of 2010.

With investor sentiment in Groupon souring, following news that chairman Eric Lefkofsky is turning more of his attention to his venture capital firm Lightbank, and analysts lowering their target price on the stock, the company may well chart another new low before the week is out.

Also likely to be top of mind for investors this week: Facebook and Yahoo. Shares in both companies stayed relatively flat on Friday, after they said they’ve settled their patent dispute and expanded their ongoing partnership. Facebook shares closed up 0.83 percent at $31.73 on Friday, while Yahoo slipped .44 percent to close at $15.78. How they’ll fare now that investors have had some time to digest the news is anyone’s guess. But the resolution of the companies’ wildly unpopular patent spat — and a promising evolution of their advertising partnership — may generate further good will from the market come Monday.

Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work

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